The lawsuit brought by traders against more than 50 companies engaged in the January short squeeze gathers pace at the Florida Southern District Court. This becomes clear from the latest documents filed with the Court and seen by FX News Group.

The action, which comprises at least 57 cases, arises from trading restrictions imposed by Robinhood and other brokers in late January 2021 in response to a dramatic rise in trading and share prices for a group of “meme stocks,” such as GameStop and AMC Entertainment.

The frenetic trading in these stocks by retail traders allegedly was spurred by members of a Reddit forum called “r/WallStreetBets,” who realized that, as the value of these securities increased, several major hedge funds and institutional investors that had taken short positions on these securities would be exposed to potentially ruinous losses (i.e., they were subject to a “short squeeze”).

Beginning on January 28, 2021, however, certain on-line trading platforms primarily used by the retail traders – in particular, Robinhood – restricted the ability of retail investors to purchase the relevant securities. Plaintiffs allege that these trading restrictions created a one-way sell situation and resulted in a steep decline in share prices for the meme stocks, which in turn caused plaintiffs economic injury and allowed the various institutional investors to cover their short positions in these securities.

All the actions in this litigation arise from the trading restrictions imposed by the on-line trading platforms.

Nearly every action asserts similar claims for breach of contract, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and negligence. Numerous actions also assert causes of action under antitrust, securities, and state consumer protection laws.

Now, some of the defendants have started producing the data requested by the traders, with the result being that traders are overwhelmed with documents.

Earlier this week, the plaintiffs filed a motion with the Court due to an unanticipated need for additional time for the defendants to produce and the plaintiffs to review “records already produced by Defendants to Congress and other government entities to Plaintiffs upon request.”

Plaintiffs are seeking additional time to allow Defendants to produce the government documents in advance of filing master complaints, as the parties continue to engage in meet and confer conferences for purposes of deciding which Defendants to name in the master complaint(s). The limited productions to date have narrowed certain issues in this case and in at least one tranche have reduced the number of Defendants to be named.

Put otherwise, the clients of the brokers hint at a possible reduction of the number of defendants, that is, some brokers will manage to avoid this lawsuit.

The traders explain how they are drowning in paperwork. The plaintiffs have begun receiving documents from five of approximately fifty defendants, with less than one week before master complaints are due.

Some companies have only begun rolling productions. For example, Robinhood commenced its production on July 3, 2021, totaling 815 pages, and has advised that it anticipates a production of between 5,000 and 10,000 total documents by Friday, July 9, 2021.

The Court has granted a brief extension of fourteen days to provide the plaintiffs with at least one week to review these documents, in advance of filing master complaints by July 26, 2021.

Let’s recall that the current list of defendant companies in this case includes:

• Interactive Brokers Corp
• Interactive Brokers, LLC
• IBG, LLC
• IBG Holdings, LLC
• IG Group Holdings PLC
• M1 Finance, LLC
• Maplelane Capital, LLC
• Melvin Capital Management, LP
• Merrill Edge
• Merrill Lynch, Pierce, Fenner, Smith
• Ally Financial Inc.
• Morgan Stanley Smith Barney LLC
• Alpaca Securities, LLC
• Open to the Public Investing, Inc.
• Apex Clearing Corporation
• Point72 Asset Management, L.P.
• Robinhood Crypto, LLC
• Robinhood Financial LLC
• Robinhood Markets, Inc.
• Robinhood Securities, LLC
• Candlestick Capital Management L.P.
• Cash App Investing LLC
• Charles Schwab & Co., Inc.
• The Charles Schwab Corporation
• Citadel Enterprise Americas, LLC
• Citadel Execution Services, Inc.
• Citadel LLC
• Citadel Securities, LLC
• Citadel, EFT, Inc.
• Sequoia Capital Operations LLC
• D1 Capital Partner, L.P.
• Square Inc.
• Square, LLC
• Stash Financial, Inc.
• TD Ameritrade Clearing, Inc.
• TD Ameritrade Holding Corp
• TD Ameritrade, Inc.
• Tastyworks, Inc.
• Dough LLC
• The Depository Trust & Clearing Corporation
• E Trade Asset Management, Inc.
• E Trade Financial Corp
• ETrade Financial Holdings, LLC
• ETrade Securities LLC
• Trade Republic
• Trading 212 Ltd.
• Trading 212 UK Ltd.
• FF Trade Republic Growth, LLC
• Webull Financial, LLC
• Financial Securities, LLC
• Firstrade Securities, Inc.
• eToro USA Securities, Inc.
• Free Freetrade, LTD.
• Freetrade, Ltd.
• Fumi Holdings, Inc.